Germany: Health Care for All

Most Patients Happy With German Health Care by Richard Knox Morning Edition, July 3, 2008 · Mention European health care to an American, and it probably conjures up a negative stereotype — high taxes, long waiting lines, rationed care. It's not that way in Germany. Very little tax money goes into the system. The lion's share comes, as in America, from premiums paid by workers and employers to insurance companies. German health benefits are very generous. And there's usually little or no wait to get elective surgery or diagnostic tests, such as MRIs. It's one of the world's best health care systems, visible in little ways that most Germans take for granted. Checking In With An Old Friend Juergen in der Schmitten was a medical student when I first met him 17 years ago. Now, he's a 42-year-old general practitioner in a suburb of Dusseldorf. On one particular night, Juergen was the doctor on call for the region. Any German who needs after-hours care can call a central number and get connected to a doctor. Around 11 p.m., a woman with a fever called Juergen. She wanted him to make a house call. They talked for maybe five minutes, in the end agreeing that she would come into his office in the morning. A situation like this would be unlikely in the United States. Americans might not get through to a doctor at all, let alone have a discussion about whether the physician should make a house call in the middle of the night to treat a case of flu. The Patients' Perspective Sabina and Jan Casagrandes say they've had really good care from the German health system. And they've used it a lot. Sabina is American, Jan is German. They live in a fourth-floor walkup with their two little girls in Cologne, an ancient city on the Rhine in western Germany. "I've probably been very expensive for the health insurance system here," Sabina says. "When I was 33 years old, I had a giant lump on my neck all of a sudden, where your thyroid is. And it was a big tumor." It took two operations to remove her cancer. Luckily it was curable with surgery and radiation. Sabina says she had the best care she could imagine. "Then I came home to my little daughter, who I couldn't really lift up because of my neck having been cut open," Sabina says. "So I asked my doctor, 'What can I do?' And she said, 'Well, your health insurance will pay for someone to come help you in the house.'" Sabina's health insurer paid a friend to shop, cook and even help care for the baby until Sabina was back on her feet. That's not unusual in Germany. In fact, under the country's system for long-term care, family members can choose to be paid for taking care of a frail elder at home if they want to avoid nursing home care. Coverage For All The health care system that took such good care of Sabina is not funded by government taxes. But it is compulsory. All German workers pay about 8 percent of their gross income to a nonprofit insurance company called a sickness fund. Their employers pay about the same amount. Workers can choose among 240 sickness funds. Basing premiums on a percentage-of-salary means that the less people make, the less they have to pay. The more money they make, the more they pay. This principle is at the heart of the system. Germans call it "solidarity." The idea is that everybody's in it together, and nobody should be without health insurance. "If I don't make a lot of money, I don't have to pay a lot of money for health insurance," Sabina says. "But I have the same access to health care that someone who makes more money has." But she acknowledges that nearly 8 percent of her salary is a sizable bite. "Yes, it's expensive. You know, it's a big chunk of your monthly income," Sabina says. "But considering what you can get for it, it's worth it." Actually, it's about the same proportion of income that American workers pay, on average, if they get their health insurance through their job. The big difference is that U.S. employers pay far more, on average, than German employers do — 18 percent of each employee's gross income versus around 8 percent in Germany. More Added Benefits In Germany Moreover, German health insurance has more generous benefits than U.S. policies cover. There are never any deductibles, for instance, before coverage kicks in. And all Germans get the same coverage. For instance, the Casagrandes' insurance covers an expensive medicine Jan needs for a chronic intestinal problem. He says if they moved to America, they might not be able to buy insurance at all because of their pre-existing conditions — a nonproblem in Germany. "He says for himself — or for us — the health care system in the United States is the major reason why we have never moved there, and never will move there. Because both of us have chronic illnesses that have to have a lot of medical attention, and we would go broke," Sabina says, translating for Jan. Jan adds something else. "It's also the No. 1 reason in the United States that people personally go bankrupt," Sabina translates, "which would never happen here ... never!" Coverage For The Family On the other side of Germany, in Berlin, we meet another couple who know both the American and German health systems. Nicole and Chris Ertl own Tip Toe Shoes, a children's shoe shop in a well-off area of the German capital. The Ertls sell high-quality European shoes — tiny Italian sandals, French and Danish boots and clogs in wonderful colors. Chris is from San Diego, Nicole is German. She also works part time as a physician therapist and gets her health care through her job like the great majority of Germans. Like the Casagrandes, she's happy with her coverage. "It's a good deal!" she says. "It's really good because it's a package." It's a package many Americans might envy. Nicole pays a premium of $270 a month for insurance that covers her children, too. Nicole pays a single $15 copayment once every three months to see her primary-care doctor — and another $15 a quarter to see each specialist, as often as she wants. She pays no copayments for her children's care —-and her insurance even covers her daughter's orthodontia bill. "They always have good care," Nicole says, "because for kids, everything is free. The drugs, it's always free" until they turn 18. Different Rules For The Self-Employed But even though her insurance covers the kids, it doesn't cover her husband. Because Chris Ertl is self-employed, he has to buy insurance on his own, from a for-profit insurance company. About one in 10 Germans buy this so-called "private" coverage. It's not just for people who are self-employed. Civil servants and anyone who makes more than $72,000 a year can opt out of the main system. It's a kind of safety valve for people who want more and can pay for it. But most people don't opt out. Chris says that's because there's a fundamental difference in the way Germans view health care and the government's role — which, in Germany, means refereeing the system and making sure it's fair and affordable. "The general opinion in Germany is always that the government will do it for us, everything will be OK," Chris says. "In the States, I think you grow up knowing that no one's going to help you do anything. If you want health care, go get it." It's important to remember that the German government doesn't provide health care or finance it directly. It does regulate insurance companies closely — the nonprofits in the main system and the for-profits where Chris gets his coverage. So Chris' insurer can't raise his rates if he gets sick or jack up his premiums too much as he gets older. The government also requires insurers to keep costs down so things don't get too expensive. "Where am I better off medically?" Chris says. "I would probably say Germany." In some ways, Chis Ertl's coverage is better than his wife's. He gets his choice of top doctors — the chief of medicine, if he wants. If he goes into the hospital, he gets a private room. When he goes to the doctor, he gets a free cup of coffee and goes to the head of the line. All this embarrasses him — and annoys Nicole. "When he goes to the doctor, he has a lot more service," she complains. Germans really hate any hint of unfairness in health care. The fundamental idea is that everybody must be covered and, preferably, everybody should get equal treatment. So the fact that 10 percent or so can buy some perks is an irritant — something Germans complain about but manage to put up with. But it's unthinkable that 48 million people wouldn't have health insurance at all — the situation in America. As an American, Chris thinks that's shameful. "It's terrible," he says. "It's unbelievable. It shouldn't happen." Germans, he says, would never tolerate that. And their system has been working pretty well for 138 years.Radio piece produced by Jane Greenhalgh Correction: In an interview, we said, "And when Germany became a nation in the 1880s, one of the first big things that the government did was to unite all of these what they call sickness funds into one system." In fact, Germany became a nation in 1871. Health Care: An International Comparison Countries with governments and economies similar to the United States have come up with a variety of methods to make sure that all of their citizens receive health care. While residents in Europe and Japan may pay higher insurance premiums or taxes than Americans, in the end, when all costs are added up, Americans spend more money on health care per person — with fewer people covered. (Data most recent available as of July 2008.) Use the drop-downs below to compare countries. Select a country: United States verses Germany United States Population: 302 million Life expectancy at birth: 78.1 Health spending as part of GDP: 15.3% System type: Employer-employee based (54%) and government funding (46%). Government covers all older adults and the disabled (Medicare), the poor (Medicaid), veterans, government employees and Native Americans. Coverage: 82% of people under 65; 100% of people 65 or over. Average annual per-person spending: Total: $6,402. Breakdown: $2,884 by government; $2,676 for private insurance, with 52% paid by employers, 48% paid by employees; $842 by consumer out-of-pocket* Financing: Larger companies self-insured. Employers and employees share costs. Income taxes fund Medicare, Medicaid and other public programs. Co-payments and deductibles highly variable in the private system. Notable features: Leading-edge technology, drugs and facilities. Most patients can choose doctors, hospitals. Biggest challenges: Health access for working poor. Discrepancies in care between rich and poor. Rising costs. Overuse of tests and procedures. Low international rankings on basic health measures, including infant mortality and preventable deaths. Prescription drug coverage: Of those with insurance, 84% are covered. Most plans require co-payments. No government controls on prices or availability. Doctors: Payments regulated in government programs; insurers set fees; no price controls for uninsured. Hospitals: Payments regulated in government programs; insurers set fees; no price controls for uninsured. Germany Population: 82.3 million Life expectancy at birth: 79 Health spending as part of GDP: 10.7% System type: Universal coverage. Mostly employer-employee based (88%). Coverage: 99.8 % -- all citizens and legal residents Average annual per-person spending: Total: $3,673 Breakdown: $2,518 on mandatory employment-based coverage, nonprofit insurance; $259 on for-profit insurance; $349 by government; and $547 consumer out-of-pocket*. Financing: Workers split premiums with employers, with each paying about 8% of workers' gross income to nonprofit "sickness funds." Those earning over $75,000 may purchase insurance from for-profit insurers. Notable features: Comprehensive coverage including basic dental and long-term care. Short waits - usually less than a month - for elective surgery. New programs provide extra attention to diabetes and other chronic illnesses. Biggest challenges: Large and growing aged population, high costs, high rate of specialist visits. Prescription drug coverage: Full coverage with small copayments. Federal panel controls prices and an expert committee decides which new treatments should be covered. Doctors: Regional groups of office-based doctors negotiate with insurers over annual budgets. Hospital-based doctors, including most specialists, are salaried. Hospitals: Insurers negotiate with hospitals over annual budgets. France Population: 61.7 millionLife expectancy at birth: 80.3 Health spending as part of GDP: 11.1% System type: Universal coverage. Employment-based system, with supplemental private insurance. Coverage: 100% Average annual per-person spending: Total: $3,374. Breakdown: $2,693 by government, $448 on private insurance, $233 consumer out-of-pocket* Financing: Employers pay equivalent of 13.1% of employee's salary to the national health insurance program. Employees pay 0.75% of salary. Income taxes also helps provide universal coverage for retirees, unemployed, disabled and the poor. Most people (87%) also have supplemental insurance from private for-profit insurers, which they purchase or is often paid for by an employer. Notable features: The national system pays 100 percent of costs for people with one of 30 long-term conditions, including diabetes and cancer. Broad choice in doctors and specialists. Strong pre- and post-natal care, strong cancer case management. Biggest challenges: Controlling costs, improving efficiency. Government currently cutting number of acute hospital beds and promoting computerized medical records to curb redundancy. Shifting some doctor duties to nurses. Prescription drug coverage: Drug effectiveness determines patient's co-pay: 0% for most cost-effective drugs; sliding scale of 35%, 65% and 100% for drugs with more limited therapeutic value. More generics since 2006, new co-pays as of 2008. Doctors: Government negotiates fees with doctor unions. Most are in fee-based private practice. Hospitals: Government sets rates for most hospitals. Great Britain Population: 61 million Life expectancy at birth: 79 Health spending as part of GDP: 8.3% System type: Tax-funded, government-run. Coverage: Universal coverage. All citizens and legal residents. Average annual per-person spending: Total: $2,723. Breakdown: $2,371 by government; $352 on supplemental private insurance, OTC drugs, direct payments to doctors. Financing: 95% of funding comes from taxes; 5% comes from user charges, such as co-payments for prescription drugs. Notable features: "Socialized" medicine. Government directly pays doctor and hospital fees. Patients do not receive bills for National Health Service care. The government's National Institute for Health and Clinical Excellence advises which high-cost treatments should be covered. Biggest challenges: Government doesn't cover care that it deems cost-ineffective and some cosmetic surgery. Maintaining a steady source of government funding in the face of increasingly expensive treatments and drugs. Prescription drug coverage: Half of England's population receives drugs for free, based on exceptions for age, disability and pregnancy. Co-payments for the rest in England. Wales and Scotland have abolished all co-payments. Doctors: Most paid by government through salary or fees; some doctors accept private insurance or fees directly from patients. Hospitals: Paid by government, some funding from private insurers. Netherlands Population: 16.4 million Life expectancy at birth: 79.4 Health spending as part of GDP: 9.2% System type: Universal coverage. Employer-employee based system, some private financing. Coverage: Universal coverage. 98.5% -- all citizens and legal residents. Average annual per-person spending: Total: $3,580. Breakdown: $1,733 by government; $1,614 on private insurance; $223 consumer out-of-pocket* Financing: A 7.2% tax on salaries, up to a maximum of $3,798 per year. Employers often pay two-thirds of that tax. Half of the tax goes into risk equalization fund to compensate insurers with high-risk subscribers. Adults under 65 also pay annual premiums averaging $1,614 to a private insurer of their choice. Government subsidizes seniors, disabled and the poor. Government covers costs for children under 18. Notable features: Blend of private health insurance companies and government regulation. Consumers have wide choice of private insurers who can't deny coverage, but can decide who provides care and how much. Strong primary and after-hours care. Biggest challenges: Controlling costs. Prescription drug coverage: Covered by private insurance, though extent, cost and quality depend on subscriber's policy. Doctors: Insurers negotiate rates. Two-thirds of primary care doctors in fee-based private practice. Most specialists based at hospitals and paid by salary. Hospitals: Market-based rates negotiated with insurers. Switzerland Population: 7.5 million Life expectancy at birth: 81.3 Health spending as part of GDP: 11.6% System type: Universal coverage. Individuals must buy coverage directly from private insurers. Coverage: All citizens and legal residents. Average annual per-person spending: Total: $4,177 Breakdown: $2,493 by government; $408 on private insurance; $1,276 consumer out-of-pocket* Financing: Consumers pay for insurance premiums and uninsured expenses. Government provides subsidies for those in need of financial assistance. Notable features: Fully private system, with government-regulated and subsidized private health care providers and insurers. Biggest challenges: The Swiss pay more for health care than anyone else in Europe. Lower- and middle-income people pay higher proportion of income for insurance. Little consumer information about physicians and hospitals compared with United States. Prescription drug coverage: Private insurance covers. Government controls prices; higher than in neighboring countries. Co-payments are 10%. Doctors: Government negotiates rates with doctor organizations. Hospitals: Government sets rates. Japan Population: 127.7 million Life expectancy at birth: 82.1 Health spending as part of GDP: 8% System type: Universal coverage. Compulsory employer-employee financed national health insurance (52%); government-paid program for people over 70, the poor and small businesses. Coverage: 100 % -- all citizens and legal residents. Average annual per-person spending: Total: $2,358 Breakdown: $1,927 by government; $71 on private insurance; $360 consumer out-of-pocket* Financing: Employers and employees each required to pay approximately 4% of salary to nonprofit, community-based insurance plan. Public assistance for small businesses and the poor. Co-payments of 30% for outpatient care; 20% for hospitalization. Ceiling on out-of-pocket costs. Notable features: Frequent doctor visits, long hospital stays. Insurers must cover everyone; can't deny a claim. Biggest challenges: Rapidly aging population. Overuse of care. Highest number of hospitals per person in the world. Shortage of physicians in many specialties and rural areas. Prescription drug coverage: 30% co-payment; government controls set prices at relatively low levels. Doctors: Government regulates fees via negotiation. Hospitals: Mostly private; government sets rates. NOTE: Out-of-pocket expenses are payments borne directly by a patient, separate from insurance fees.